Geopolitics & Energy Security

In order to meet the demand for conventional fossil fuels, supplies will need to be accessible and reliable. In today’s energy map, conventional oil and natural gas resources are increasingly concentrated in a handful of non-OECD countries, which has implications for the energy system.1

Producing and consuming nations need to work together to ensure that a global and open marketplace for energy continues to supply affordable, reliable energy. National oil companies and energy ministries in countries with energy reserves make policy decisions about how to develop and produce their resources, which in turn determines the availability of energy resources. Producer countries may use their assets as points of leverage with oil companies and consumer nations – either to gain commercial benefits or to further national or foreign policy objectives.2 In order to maintain an open market and channels of investment in energy, there will need to be dialogue between both producing and consuming nations about maintaining an interdependent system and thus improving global energy security.3

To ensure energy security in a time of geopolitical volatility, it will be important to develop a policy framework in which producing nations effectively agree to increase capacity through shared investment with consuming nations committing to increasing the efficiency of their energy usage while providing reliable demand for producers. Significant energy diplomacy will be needed to realize such a framework, but the beneficial outcomes would include diminished producer-consumer confrontation and potentially reduced consumption and volatility in prices.4

1. 1 "Facing the Hard Truths About Energy," National Petroleum Council, 2007, p.10. http://www.npchardtruthsreport.org/download.php
2. 2 Ibid, p.10.
3. 3 "Energy Policy," Chevron. http://www.chevron.com/globalissues/energypolicy/
4. 4 Ibid.